Sensex tumbles 302 pts

The Bombay Stock Exchange Sensex slumped 1.84 per cent on Monday to its lowest close in a week on continued foreign fund outflows dictated by global growth worries, in the absence of positive local triggers, with Reliance Industries and lenders leading the losses.

Global economic slowdown fears continued to haunt world markets as Greece's admission that it will miss its deficit targets this year and next despite harsh new austerity measures brought the spectre of a debt default closer. The broad-based selling dragged index heavyweight Reliance Industries down as much as 2.49 per cent, while lenders ICICI Bank, HDFC Bank and State Bank of India dropped between 1.8 per cent and 4.1 per cent.

Just a handful of shares including Coal India and Mahindra and Mahindra were spared. The world's top coal miner notched up gains of 1.13 per cent, while the automaker added 0.85 per cent. The 30-share BSE index fell 302.31 points to 16,151.45, with 22 of its components closing in the red.

The 50-share NSE index ended 1.9 per cent lower at 4,849.50 points. There were about three losers for every gainer in the broader market, with over 458 million shares changing hands.

Shares had shed 12.8 per cent in the three months to September, its biggest quarterly fall since the months following the Lehman Brothers collapse in 2008, as global growth worries stoked risk aversion.

A private survey on Monday showed Indian manufacturing growth nearly stalled in September, hitting its weakest spot, since March 2009 on slowing output and orders growth following a spate of interest rate increases. The HSBC Markit India Manufacturing PMI fell more than two points to 50.4 from 52.6, inches away from the 50 mark which divides growth and contraction.

Lenders were among the big losers on concerns India's central bank may not yet be done with its rate hike cycle. The banking index closed down 2.82 per cent, with top state-run lender SBI shedding 2.59 per cent to Rs 1861.60. India has raised interest rates a dozen times since March 2010 to tame near double-digit inflation and has signalled more such moves were likely.